Friday, June 5, 2015

West African States holds rate, sees 1.8% inflation

The Central Bank of West African States (BCEAO), the monetary authority representing eight nations in western Africa, maintained its benchmark marginal lending rate at 3.50 percent and forecast annual inflation of 1.8 percent in the next 24 months, in line with its stability objective.
BCEAO, which has kept its marginal lending and liquidity injection rate of 2.50 percent steady since September 2013, added that inflation in the West African Monetary Union (WAMU), rose to a rate of 0.5 percent at the end of March from 0.4 percent in December 2014 due to higher cost of food, building materials and housing services in some countries.
In the first quarter of 2015, the Gross Domestic Product of WAMU expanded by an annual 6.2 percent, driven by a strong services sector, and for the full year growth is projected at 6.7 percent, up from 6.5 percent in 2014 due to growth in industrial and services sectors.
BCEAO noted "continued government deficits at high levels," but added this was in conjunction with significant investment in infrastructure in most states. However, the Monetary Policy Committed on June 3 called on fiscal consolidation in the medium term.
In April BCEAO Governor Tiemoko Meyliet Kone said growth in the currency union was on track to reach 7 percent this year, helped by a recovery in Europe and expected 9.1 percent growth in the Ivory Coast, the world's largest cocoa producer and over one-third of the bloc's $80 billion economy.
The eight members states in BCEAO, headquartered in Dakar, comprise Benin, Burkina Faso, the Ivory Coast, Guinea-Bissau, Mali, Niger, Senegal and Togo. These nations, grouped in WAMU, share a single currency, the franc of the African Financial Community, or the CFA franc. The CFA franc is fixed at 655.957 to the euro.
The union's central bank, headquartered in Dakar, serves Benin, Burkina Faso, Ivory Coast, Mali, Niger, Senegal, Togo and Guinea-Bissau. Its CFA franc is fixed at 655.957 to the euro.